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Luxury Real Estate Experiences Global Boom

Last updated Tuesday, September 13, 2022 14:45 ET

Ukio explains why luxury real estate market is set to boom in 2023.

Barcelona, Spain, 09/13/2022 / SubmitMyPR /

Accumulation of wealth at the top of the pyramid, emergence of new billionaires and business opportunities heat up the sector.

With the resumption of the economy from mid-2021, the high-end real estate market around the world began to experience a new cycle of high prices and business. In Spain, for example, rental demand for luxury apartment in Barcelona grew by 15% last year.

According to a survey by the consultancy Knight Frank published in March, the price of real estate in this segment in the 28 main global markets of the sector is expected to rise, on average, 5.7% this year. Cities such as Dubai, Miami and Zurich may register percentages above double digits, reaching up to 12% overprice.

According to Ukio, a luxury apartment monthly rental company based in Barcelona, this is also the case for cities like Barcelona, Lisbon, Madrid or Berlin. One reason for this phenomenon is that wealthy people at the top of the pyramid are not affected by economic crisis.

Last year, the population of millionaires in the world — with wealth above US$ 5 million — grew by almost 20%, as shown in “The Report: 2022 global luxury market insights”, produced by Coldwell Banker Real Estate LLC, of ​​the United States. . Another data, from Oxfam, revealed the emergence of a new billionaire every 26 hours in 2021.

In the opinion of Brain's managing partner, the movement to redefine housing triggered by the pandemic is still the main justification for the growth of this market, since the purchase or rent decision of the high-income customer is not influenced by economic factors — the search for more comfort and, mainly, sophistication prevails.

There is an unprecedented quest in modern history for well-being. For the luxury consumer, comfort differentials such as an apartment with high ceilings and integrated balconies are important.

This is one of the few niches that is not usually directly affected by the impacts of the crisis, since consumers in this segment have high purchasing power and hardly suffer a reduction in their capital. In fact, most people interested in this type of property see the acquisition of a luxury property as a promising investment with high chances of appreciation in the medium and long term.

On the other hand, despite the relative prosperity of this sector, real estate companies need to be constantly renewing themselves. For this, it is necessary to develop new marketing strategies and invest in a personalized property so that it can attract interest and satisfy the profile and personal aspirations of this type of consumer.

Although there are a large number of enterprises in this field, it is necessary to stand out from the others. The high-end public is demanding and observant. In this sense, he wants an exclusive and innovative property to live in, which stands out in the field, and not the “same of the same”.

The concept of luxury real estate

Luxury houses, mansions or apartments are large, bold, beautiful and elegant environments whose purpose is to offer maximum comfort, versatility and practicality to its residents. The decor can be classic or more modern.

The objective is to prove that luxury goes far beyond a superfluous and expendable concept. On the contrary, it has already become a fundamental part of environments that present comfort and refinement, but without much exaggeration or unnecessary decorations.

These characteristics make such properties have great value and aesthetic appreciation. In this sense, it is very common to invest in these goods or even finance luxury properties for medium and long-term sales.

The purchase of real estate is a great option to protect the assets due to the economic variables that the global economy is experiencing today. It is a good investment option. In addition, in metropolises there are few spaces available in prime areas. On the luxury rental part of the market, experiencing significant growth, the struggle to find accommodation that would fit high expectations makes the property rentals products very attractive. 

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